Major Chinese Bitcoin Exchanges are shutting down due to pressure from regulators

Major Chinese Bitcoin Exchanges are shutting down due to pressure from regulators

All the major Chinese bitcoin exchanges have received instructions from the regulatory authorities to voluntarily shut down their services by Sep 15th. China’s central bank is concerned that the ICO boom and the surge of Cryptocurrency trading had created an imbalance in the Chinese economy as things were going out of control. Hence, The Office of the Leading Group of Beijing Internet Financial Risks Remediation issued a notice to all the major exchanges asking them to immediately stop their services.

Initially, the People’s Bank of China along with six other departments made a public announcement on Sep 4th through their official website regarding the new regulation policies which completely banned ICO (Initial Coin Offerings) in China. Due to this sudden announcement, all the major Cryptocurrencies including Bitcoin plummeted more than 20 percent last week.

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Following the ICO ban, the Chinese regulators also decided to shutdown all Bitcoin exchanges which allowed users to buy digital currencies in exchange of Chinese Yuan. The official message from the regulators stated that all exchanges should come up with risk-free detailed clearing plan before Sep 20th. The exchanges were asked to stop new user registrations immediately and issue closure announcements by Sep 15th midnight. They also instructed the exchanges to deal with all the claims and liabilities properly and ensure that the virtual currencies and investor funds are returned safely. They were also asked to save all the trading data of users and provide it in the form of DVDs to the local authorities.

BTC China, which is one of the largest and oldest Bitcoin exchanges in the country, was the first to announce their users that they will suspend their local trading services by the end of September. The exchange notified its customers through several tweets stating that this decision was a direct result of the regulatory statements from China’s Central bank. BTC also requested the customers to make withdrawal requests as early as possible. They also told that their Bitcoin mining pool services will not be affected and their international operations outside of China will continue as usual.

BTCC-Twitter

Following this, ViaBTC which is a popular Cryptocurrency exchange based out of Shenzen, also issued a public notice regarding the closure of their operations in the Chinese Mainland by Sep 30th. They announced that they will halt asset deposits and new user registration by Sep 25th and their website will be completely closed by September end. The two other exchanges OKCoin and Huobi have also followed the same trend by announcing that they will cease their services by end of October.

While these exchanges will no longer allow Chinese citizens to buy or sell Cryptocurrencies through them, they will still continue their international operations outside of China and mining services alone. Smaller exchanges like Yunbi also announced their closure following regulatory pressure from Beijing Authorities.

China’s exit from the digital currencies market has created a huge downfall in the prices of Bitcoin and other altcoins. The Cryptocurrency market was also affected by the negative statements from JP Morgan’s CEO Jamie Dimon who called bitcoin a “fraud” and stated this Bitcoin’s bubble is worse that the tulip mania of 17th century.

China’s central bank is yet to respond for questions regarding the future of Cryptocurrencies in the country. It’s also rumoured that the Chinese central bank is developing its own digital currency which is yet to be released to the public. China which accounted for more than 40% of the trading volume during 2017 has now become a small player in the Crypto world due to tightened controls by the regulators.